V.S. Munot, Panvel V. Income-tax Officer,

ITA 136/PUN/2016

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 1961 (ITAT-PUNE)
• Duration Of Justice: 2 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-04-2016
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Assessment Year: 2005-2006
• Appeal Filed On: 01-02-2016
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: B; HEMANT KUMAR C LEUVA JAIN
• Assessee Lawyers: K SRINIVASAN
• Keywords: Opportunity of being heard; Additional evidence

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH B, PUNE . . , ! , # $ BEFORE SHRI R.K. PANDA, AM AND SHRI VIKAS AWASTHY, JM . / ITA NO.136/PN/2016 #& & / ASSESSMENT YEAR : 2005-06 V.S. MUNOT, B-19, YASOMANGAL APARTMENTS, R.K.PATWARDHAN ROAD, PANVEL 410 206 PAN NO.AQRPM4486H . / APPELLANT V/S ITO, WARD-2, PANVEL . / RESPONDENT / APPELLANT BY : SHRI K. SRINIVASAN / RESPONDENT BY : SHRI HEMANT KUMAR C. LEUVA JAIN & B / ORDER PER R.K. PANDA, AM : THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER DATED 14-12-2015 OF THE CIT(A)-II, THANE RELATING TO ASSESSMENT YEAR 2005-06. 2. GROUNDS RAISED BY THE ASSESSEE ARE AS UNDER : 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN L AW CIT(A) ERRED IN CONFIRMING THE FOLLOWING ADDITIONS M ADE BY A.O. (1) OPENING BALANCE OF RS.69,033/- (2) MATURITY OF N SCS RS.39,123/- (3) MATURITY OF KVPS RS.80,000/- (4) RETUR N OF LOAN RS.7,500/- AND THE SAME MAY BE DELETED. / DATE OF HEARING :12.04.2016 / DATE OF PRONOUNCEMENT: 15.04.2016 2 ITA NO.136/PN/2016 2. ON THE FACTS AND CIRCUMSTANCES OF THE CASE THE AO AN D CIT(A) FAILED TO GIVE PROPER EFFECT TO THE DIRECTIO NS OF ITAT VIDE THEIR ORDER DATED 25-10-2012 3. THE ADDITIONS MADE BY ASSESSING OFFICER AND CONFIRMED BY CIT(A) MAY BE DELETED AND THEY MAY BE DIRECTED TO A CCEPT THE RETURN OF INCOME FILED OR ANY OTHER APPROPRIATE DIR ECTIONS GIVING RELIEF TO THE ASSESSEE BE GIVEN. 4. THE APPELLANT CRAVES LEAVE TO ADD, ALTER OR AMEND ANY GROUNDS OF APPEAL AND PRODUCE ADDITIONAL EVIDENCE AT THE TIME OF HEARING. 3. THIS IS THE SECOND ROUND OF LITIGATION BEFORE THE TRIBUNA L. FACTS OF THE CASE, IN BRIEF, ARE THAT ON THE BASIS OF INFORMA TION REGARDING TRANSACTIONS CARRIED OUT BY THE ASSESSEE REC EIVED IN THE AIR FURNISHED U/S.285BA OF THE ACT AND SINCE THE ASS ESSEE HAD NOT FILED RETURN OF INCOME, THE AO ISSUED NOTICE U/S.142(1). IN RESPONSE TO THE SAME THE ASSESSEE FILED TH E RETURN OF INCOME ON 19-09-2007. THE AO COMPLETED THE ASSESSMENT U/S.143(3) ON 31-12-2007 DETERMINING THE TOTA L INCOME AT RS.3,25,656/- BY MAKING THE FOLLOWING ADDITIONS : 1. OPENING CASH BALANCE RS. 1,09,033/- 2. NSC MATURED RS. 39,123/- 3. KVP MATURED RS. 80,000/- 4. RETURN OF LOAN& ADVANCES GIVEN LOAN RECEIVED FROM RELATIVES RS. 97,500/- ------------------- TOTAL RS. 3,25,656/- ------------------ 4. THE MATTER TRAVELLED UPTO THE TRIBUNAL AND THE TRIBUN AL VIDE ORDER DATED 25-10-2012 RESTORED THE MATTER TO T HE FILE OF THE AO WITH A DIRECTION TO DECIDE THE ISSUE AFRESH IN ACCORDANCE WITH LAW AFTER GIVING DUE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. SUBSEQUENTLY, THE AO VIDE ORDE R DATED 26-11-2013 DETERMINED THE TOTAL INCOME AT RS.3,14,540/- B Y MAKING ADDITION OF RS.2,35,656/- TO THE TOTAL INCOME OF THE ASSESSEE ON ACCOUNT OF THE FOLLOWING ADDITIONS : 3 ITA NO.136/PN/2016 OPENING CASH BALANCE : RS.1,09,033/- MATURITY OF NSC : RS.39,123/- MATURITY OF KVP : RS.80,000/- REFUND OF LOANS AND ADVANCES : RS.75,00/- ----------------- RS.2,35,656 ----------------- 5. IN APPEAL THE LD.CIT(A) GAVE PART RELIEF BY GIVING BENEFIT OF RS.40,000/- OUT OF OPENING CASH BALANCE OF RS.1,09,033/- AND SUSTAINED THE BALANCE ADDITION BY OBSERVING AS UNDER : I HAVE CAREFULLY CONSIDERED FACTS OF THE CASE, FINDIN GS OF THE AO IN THE ORIGINAL ORDER AS WELL AS SET ASIDE ORDER, FINDI NGS OF THE HON'BLE ITAT PUNE IN ABOVE REFERRED ORDER AND WRITT EN SUBMISSION MADE BY THE APPELLANT, DURING THE APPELLATE PROCEEDINGS AND NOTICED THAT THE AO IN THE SET ASIDE P ROCEEDINGS HAS ALREADY ACCEPTED THE DEPOSIT OF RS.90,000/- IN TH E NAME OF YOGITA CHOUGHULE (RS. 40,000/-), MANISH JUGE (RS.30,0 00/-) AND PUSHPA MUNOT (RS. 20,000/-). AS REGARDS MATURITY PROCEE DS OF NSC & KVP AND RETURNED LOAN OF RS 7,500/- ARE CONCER NED, THE SAME COULD NOT BE SUBSTANTIATED , IN-SPITE OF GIVING RE ASONABLE OPPORTUNITY OF BEING HEARD, EVEN DURING COURSE OF A PPELLATE PROCEEDINGS. IN VIEW OF THESE FACTS THE ADDITIONS OF MA TURITY PROCEEDS OF NSC OF RS.39,123/-, KVP OF RS.80,000 AND L OAN RETURNED OF RS.7,500/-, MADE BY AO ARE HEREBY SUSTAIN ED. AS REGARDS OPENING BALANCE OF RS. 1,09,033/-, IS CONCERNE D THE CONTENTION OF THE APPELLANT WHO IS AROUND 73 YEARS OL D THAT THE SAME HAS BEEN INTRODUCED, OUT OF PAST SAVINGS CANNOT BE DENIED IN TOTO. HOWEVER, THE APPELLANT HAS SQUARELY FAILED TO ESTABLISH AVAILABILITY OF ABOVE AMOUNT WITH HIM, BY WAY OF CR EDIBLE DOCUMENTS. CONSIDERING THE ABOVE FACTS IN ENTIRETY, IN MY CONSIDERED OPINION, THE CREDIT FOR THE AVAILABILITY OF CASH IN HAND, AS OPENING BALANCE, ON ACCOUNT OF PAST SAVINGS, IN THE CASE OF THE APPELLANT, AT THE MOST, CAN BE ALLOWED AT RS. 40,000/ -.AND THE BALANCE AMOUNT OF RS. 69,033/-, IS HEREBY, SUSTAINED. ALL THE ABOVE GROUNDS OF APPEAL ARE DECIDED, ACCORDINGLY. IN THE RESULT THE APPEAL IS PARTL Y ALLOWED . 6. AGGRIEVED WITH SUCH ORDER OF THE CIT(A) THE ASSESSEE IS IN APPEAL BEFORE US. 7. THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE MATTER WAS SET ASIDE BY THE TRIBUNAL EARLIER FOR GIVING REASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE FO R SUBSTANTIATING THE MATURITY PROCEEDS OF NSC AND KVP. H E 4 ITA NO.136/PN/2016 SUBMITTED THAT DUE TO FLOOD AT THE AREA WHERE THE ASSE SSEE RESIDES ALL THESE OLD RECORDS WERE DESTROYED FOR WHICH TH E ASSESSEE IS NOT IN A POSITION TO SUBSTANTIATE WITH EVIDENC E REGARDING THE MATURITY PROCEEDS OF KVP AND NSC. THE P OSTAL AUTHORITIES ALSO COULD NOT GIVE THE DETAILS. 8. AS REGARDS THE OPENING CASH BALANCE IS CONCERNED H E SUBMITTED THAT THE ASSESSEE IS MORE THAN 70 YEARS OLD NOW AND THE REVENUE AUTHORITIES SHOULD NOT HAVE DOUBTED TH E OPENING CASH BALANCE OF RS.1,09,033/- ESPECIALLY WHEN THE ASSESSEE HAS FILED THE YEAR-WISE CASH FLOW STATEMENT AND BALANCE SHEET. ALTHOUGH HE HAS NOT FILED THE RETURN OF INC OME FOR THE PAST YEARS HE SUBMITTED THAT IN THE INTEREST OF JUSTICE THIS MATTER SHOULD BE CONSIDERED LIBERALLY AND A LENIENT V IEW SHOULD BE TAKEN BY ALLOWING THE GROUNDS RAISED BY THE ASSESSEE. 9. THE LD. DEPARTMENTAL REPRESENTATIVE ON THE OTHER H AND HEAVILY RELIED ON THE ORDER OF THE CIT(A). HE SUBMITTED TH AT THE LD.CIT(A) HAS ALREADY GIVEN REASONABLE BENEFIT OUT OF TH E OPENING CASH BALANCE. THEREFORE NO FURTHER BENEFIT SHOULD BE GIVEN TO THE ASSESSEE AND THE APPEAL FILED BY THE ASSESS EE SHOULD BE DISMISSED. 10. WE HAVE CONSIDERED THE RIVAL ARGUMENTS MADE BY BOT H THE SIDES, PERUSED THE ORDERS OF THE AO AND CIT(A) AND T HE PAPER BOOK FILED ON BEHALF OF THE ASSESSEE. WE HAVE ALSO CONSIDERED THE VARIOUS DECISIONS CITED BEFORE US. WE FIND I N THE FIRST ROUND OF LITIGATION BEFORE THE TRIBUNAL THE ASSESS EE HAD PLEADED THAT DUE TO VERY LIMITED TIME GIVEN BY THE AO TO 5 ITA NO.136/PN/2016 THE ASSESSEE, THE ASSESSEE WAS NOT IN A POSITION TO SUBSTANTIATE HIS CASE BY EXPLAINING THE MATURITY PROCEEDS OF NSC, KVP AND OPENING CASH BALANCE ETC. WE FIND DURING THE COURSE OF ASSESSMENT PROCEEDINGS THE ASSESSEE COULD NO T SUBSTANTIATE THE OPENING CASH BALANCE OF RS.1,09,033/- AS WELL AS MATURITY PROCEEDS OF NSC OF RS.39,123/- AND KVP O F RS.80,000/- AND LOAN RETURNED TO THE TUNE OF RS.7,500/- FO R WHICH THE AO MADE THE ADDITION OF RS.2,35,656/-. WE FIND THE LD.CIT(A) GAVE PART RELIEF BY GIVING RELIEF OF RS.40,000/- OUT O F THE OPENING CASH BALANCE AND SUSTAINED THE BALANCE AMOUNT. 11. SO FAR AS THE OPENING CASH BALANCE OF RS.1,09,033/- IS CONCERNED WE FIND THE LD.CIT(A) CONSIDERING THE PAST SAVING S OF THE ASSESSEE HAS ALLOWED CREDIT OF RS.40,000/- AND SUSTAINED BALANCE OF RS.69,033/-. SINCE THE ASSESSEE IS QU ITE OLD AND WAS WORKING AS AN ACCOUNTANT AND THE CAPITAL ACCOUNT ALSO DOES NOT SHOW SUBSTANTIAL INVESTMENTS, THEREFORE, CONSIDERING THE TOTALITY OF THE FACTS OF THE CASE , AN AMOUNT OF RS.1 LAKH OUT OF RS.1,09,033/- CAN BE REASONABLY CONSIDERED AS THE OPENING CASH BALANCE. THUS, OUT OF RS.1,09,033/- ADDED BY THE AO ON ACCOUNT OF OPENING CASH BALANCE THE ASSESSEE GETS RELIEF OF RS. 1 LAKH AND THE BALA NCE AMOUNT OF RS.9,033/- IS SUSTAINED. 12. SIMILARLY IN ABSENCE OF ANY SUPPORTING MATERIAL TO EXPLAIN THE RETURN OF LOAN OF RS.7,500/- THE SAME IS UPHELD. 13. SO FAR AS THE ADDITION ON ACCOUNT OF MATURITY PROCE EDS OF NSC AT RS.39,123/- AND KVP OF RS.80,000/- IS CONCERNED IT IS THE SUBMISSION OF LD. COUNSEL FOR THE ASSESSEE THAT DU E TO 6 ITA NO.136/PN/2016 FLOOD AT LOW LYING AREA OF PANVEL, WHERE THE ASSESSEE RESID ES, THE OLD PAPERS ARE DESTROYED AND HE IS NOT IN A POSITION TO PRODUCE THE SAME. HOWEVER, THE YEAR-WISE CASH FLOW AND BALANCE SHEET REFLECT THE ACCRUAL OF SUCH INTEREST. CONSID ERING THE TOTALITY OF THE FACTS OF THE CASE, THE SMALLNESS OF KVP AND NSC AND CONSIDERING THE OLD AGE OF THE ASSESSEE, WE TAKE A LENIENT VIEW AND ACCEPT THE EXISTENCE OF SUCH KVP AND NS C WHICH GOT MATURED DURING THE IMPUGNED ASSESSMENT YEAR. WE ACCORDINGLY SET ASIDE THE ORDER OF CIT(A) AND DIRECT THE AO TO ALLOW THE CREDIT FOR MATURITY OF NSC AND KVP AND DELETE TH E ADDITION ON THIS ACCOUNT. THE GROUNDS RAISED BY THE AS SESSEE ARE ACCORDINGLY PARTLY ALLOWED. 14. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS PART LY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 15-04-2016. SD/- SD/- ( VIKAS AWASTHY ) ( R.K. PANDA ) JUDICIAL MEMBER ACCOUNTANT MEMBER PUNE ; DATED :15 TH APRIL 2016 ) *#,! -! / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT 3. % ( ) , / THE CIT(A)-2, THANE 4. % / THE CIT-2, THANE 5 . 6. ( ++,, ,, / DR, ITAT, B PUNE; 0 / GUARD FILE. / BY ORDER , ( + //TRUE COPY // ( + //TRUE COPY// 23 + , / SR. PRIVATE SECRETARY ,, / ITAT, PUNE